Sterling Ends the Week on a High Note

Dan Blystone TradersLog.com

The British Pound surged on Thursday, after UK Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar stated that they could see a pathway to a possible Brexit deal before the end of the month. The optimistic mood continued on Friday, with talks between UK Brexit Secretary Stephen Barclay and EU chief negotiator Michel Barnier being described as "constructive".

In the initial rally on Friday, GBP/USD soared to above 1.2680, its highest level since early July. Some analysts attributed the dramatic price move to a scramble to cover short positions. Comments from European Council President Donald Tusk while speaking in Nicosia, Cyprus triggered a brief spurt of selling. After Mr. Tusk stated that “time is practically up” for Britain to reach a Brexit deal, GBP/USD sank sharply before stabilizing.

In a tweet posted on Friday, he was cautious yet optimistic:

The UK has still not come forward with a workable, realistic proposal. But I have received promising signals from Taoiseach @LeoVaradkar that a deal is possible. Even the slightest chance must be used. A no deal #Brexit will never be the choice of the EU.

Mr. Tusk also revealed that he told UK Prime Minister Boris Johnson that unless a solution was reached by Friday October 11th, he would publicly announce that he had exhausted all opportunities of securing a deal ahead of the EU summit set to take place on October 17th and 18th.

Looking at the GBP/USD daily chart we can see that price has rallied up to the key resistance level of the 200 period simple moving average - sometimes described as the ‘line in the sand’ dividing bullish and bearish territory. Late in the day the pair made new highs, briefly reaching above 1.27.

Author

Dan Blystone

TradersLog.com

Experience Dan Blystone began his career in the trading industry in 1998. He worked as an arb clerk on the floor of the Chicago Mercantile Exchange (CME), flashing orders into the currency futures pits.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.